Making the Most of the Middle

Business direction background with two people

The Indiana Chamber Foundation conducted research on Indiana middle-market firms nearly a decade ago and initiated programming efforts (that continue today) to help grow those companies.

Now, American Express and Dun & Bradstreet offer the Middle Market Power Index.

The latest report rates Indiana fourth for growth in the number of middle market firms – defined as between $10 million and $1 billion in annual revenues) from 2011 to 2016. The current 3,916 firms in this category constitute an increase of more than 101% from five years earlier.

While small businesses (less than $10 million in revenues in this case) comprise more than 98% of all businesses, Indiana is one of 10 states – in a somewhat Midwest-dominated category – in which middle market firms comprise a greater than average share of companies. The numbers: Illinois and Wisconsin, 1.5% share; Michigan and New Jersey, 1.3%; Indiana, Kansas, Massachusetts, North Dakota, New York and Ohio, 1.2% each.

Maybe part of the explanation for the above is that middle market firms are much more likely to be found in manufacturing (18%) and wholesale trade (17%).

Just as the Chamber found previously, these firms makes an outstanding economic contribution. While comprising just less than 1% of all businesses, they employ more than one in four workers (27%) in the private sector and contribute 26% of revenues.

You’re Likely to Spend Money ‘Where Everybody Knows Your Name’

Who doesn’t get a little giddy (though discretely to keep your cool, of course) when greeted by name upon entering a restaurant or business? It makes you feel like a bit of a celebrity, right? Okay, maybe it’s just me.

But it seems that “Cheers,” or at least the theme song to the popular 80s show, got it right – you really are more likely to go to a place where you’re well known, or at least where somebody knows your name.

It turns out that research backs that up: 23% of consumers surveyed choose to shop at a locally-owned, independent small business where employees are friendly and greet customers by name, according to American Express OPEN Small Business Saturday Consumer Pulse. And 22% of those surveyed choose to shop at a small business because the people that work there know them and make recommendations of products and services they might like.

That makes sense. In this world of online shopping and social media, it’s nice to have that face-to-face connection. I’d also rather support someone with my hard-earned money that takes the time to learn my face and name. The friendly factor is also incredibly important: What’s that old adage about catching more flies with honey than vinegar?

The research also found that 73% of consumers choose to shop local to support businesses in their community because they don’t want those businesses to go away.

Some other interesting survey results include:

  • A majority of consumers (87%) share their favorable opinions of businesses with others; 85% use word of mouth, 24% use social media and 13% use review sites. Only 69% share unfavorable opinions.
  • Men actually spend more than women at the one small business they shop at the most ($110 versus $95).
  • Resources to find locally-owned independent stores or restaurants vary by region: Consumers in the south and west are more likely to use deal sites such as Groupon and Living Social; consumers in the northeast are more likely to use web sites of traditional media outlets; north central states use social media sites like Facebook and Twitter.

So what do you think? Are you more likely to support your local businesses and restaurants in general or because you feel a bit important when you walk in and are greeted by name?